Wednesday, March 23, 2011

China's Oil Imports From Libya

A Chinese student asked me today what China might learn from the Libya situation about the risks of investing in unstable countries. I mentioned that China's FDI investments in Libya are not large, although China does import oil produced in Libya. But how does China compare with other countries as a buyer of Libyan crude? A quick Google effort found the AP article below, which I have not verified with the source, the International Energy Agency.

Europe gets most of Libya's oil exports

By The Associated Press

Tuesday, February 22, 2011 at 12:55 p.m.

NEW YORK — Europe gets over 85 percent of Libya's crude exports. The rest goes to Asia, Australia and the U.S. Here's a breakdown of how much oil various countries import from Libya (in barrels per day) and the percentage of a country's total crude imports supplied by Libya.

13 comments:

While Libya is perhaps not of major energy security concern to China (though lets not scoff at 3%) what do you think about other countries like Angola, Sudan and Eq Guinea? While the former might be stable now, this is by no means assured in the future. The latter two are obviously not very stable... This has, and will, pose problems for China.

Oil producing nations are statistically more likely to be affected by civil war and so this is not a problem faced by China alone.

The question is how China responds to instability and security threats in these countries: arms? military training? UN action? coalitions of the willing?

And does having such stark and real interests in other countries mean that non-interference starts becoming an obstacle to protecting them?

Actually, Sudan is more stable now than it has been for the last ten years.

There is now a truce in Darfur. Bashir looks to be ready to accept the secession of South Sudan. And the government-to-be in South Sudan has already sent a trade delegation to Beijing -- a year in advance of the referendum.

How does China respond to instability in other countries? They'll cross that bridge when they get there. At the moment, their investments are safer than they were when they first made them.

Good questions Claude. And Tom, you're right about the situation in Sudan having improved. Zimbabwe is also improved, for the moment, although it is in continual danger of backsliding. Leo, I've added the chart you referenced in a revision to the blog posting. It's the same data, but visually much better presentation! Thanks for the tip.

Meanwhile, I have read dozens of articles on the impact of the Libyan events on the Chinese presence in Africa and the Middle East, but they are always speculation based on analysis of "experts", also many Chinese, but they never represent the Chinese government view. Based on the facts I just see a trend, timid to foreign countries, especially to Third World countries, but very pronounced for the Chinese audience, especially in their images;

China pursues an ideological struggle for globally bringing discredit to democracy. I noticed this the first time after the elections in Kenya, then Ivory Coast and now all over the Middle East: Democracy is not a solution to Third World countries. Elections bring only chaos and are a nuisance to the "harmonious" economic development of a country. They only bring political instabillity and social disruption ... And the target audience is certainly not always the people of those countries but also the elites;

Wu said that Washington's support for discarding Hosni Mubarak, the former Egyptian president, a long-term strategic ally of the US, "hurt and disappointed" both Arab leaders and America's other allies in the region."There is no need for comparisons or to think that as the US goes down, China will necessarily fill the void," he added.

Mr. Wu Sike, is China's envoy to the Middle East .... The images give very graphic scenes of destructions, but in China itself, also of the vigorous intervention of the security forces ... The lesson is clear ....

And finally, my opinion for what it's worth: China is immensely annoyed by the fact that the country is running an economic sideshow: at every crisis and conflict worldwide China appears to be irrelevant. From the floods in Pakistan to the Jasmine uprising, each time everyone is increasingly falling back on the Western powers, although China is their main trading patner (in Africa, the Middle East, ..) This is a problem thoroughly studied in Beijing and China is quickly learning ... And yes, by this process it is maturing, but the improvements made very rarely deviate from the standard U.S. practices. And then the question arises: does the world need another US-style superpower?

Personally I think the biggest misconception related to the conflict in Libya (and thus the relationship between China and Libya) is to reduce it to a conflict over oil ...

Or yes, it is all about oil, but in the same way that Iraq is about oil and Afghansitan about resources. Of the more than two dozen contracts since the U.S. occupation of Irak there is only one that went to a U.S. major( Exxon). And we do not know where the oil goes, because Exxon is also active throughout Asia. All other oil contracts were wholly or in majority for the Asian market. Just like all the new commodity contracts in Afghanistan go to China ...

The 2 sets of oiltrade figures predate the yasmine uprising and to my knowledge since the rebellion all the oil was shipped to India, China and Austria. My last info was that China counted for about 40% of this production and that at least one Chinese tanker was obliged to leave empty. Whether, after the intervention and blockade, oil is still traded, seems to be a mistery.

In any case, China is open to any form of trade: http://www.google.com/hostednews/afp/article/ALeqM5g-MzattDq8GgoQrKB1pOhkMRk4iQ?docId=CNG.0af06a235b3fa5689ba5127dac77bed9.a81

But Chinese companies suffered enormous damage. And along with a few South Korean projects for as far that I know,only the majority of Chinese projects were attacked and looted by the Libyan people.

According to the Chinese Ministry of Commerce, there were 75 Chinese companies operating in Libya in 50 projects and 27 were attacked. That more than 40,000 workers were evacuated gives an idea of the size of those contracts. Individual figures I found for Huafeng Construction Corp. who said that 1.5 billion yuan (227 million USD) have been lost and ZTE (according to an anonymous employee it lost more than 100 million yuan).

But no problem for those companies, the Chinese state (= China Export & Credit Insurance Corporation. = State = population) will indemnify and the rebalancing that is promised since years will be poposed a little more ...

When I look at the Jasmine Protests in Sudan (country opening up its airspace for attacks on Libya) and the latest reports of Sentinel, I do not believe that we have a "stable country" here.http://www.globalpost.com/dispatches/globalpost-blogs/africa-emerges/clooney-sudan-satellite-border

Zimbabwe: Mugabe takes 45 people to court for treason (= death penalty) linked to a yasmine style protest, feels hyimslef obliged to offer asylum to Khaddafi now, and also needs to explain to his population why Chinese companies do not come under black enpowerment measures. http://www.israelnationalnews.com/News/News.aspx/143065 I would not put my money where my mouth is with regard to Zimbabwe…

China's top two state oil firms have agreed to lift a total of about 140,000 barrels of crude oil per day from Libya under term deals for 2012, set to raise China's crude purchases from the North African exporter after supply disruptions last year.

State trader Unipec, the trading arm of top Asian refiner China Petroleum & Chemical Corp (Sinopec), would lift about 100,000 bpd from Libya, while Chinaoil, trading department of PetroChina, would buy another 40,000 bpd, traders with knowledge of the deals told Reuters.

just make this right, you don't even get the number right, how can you get any kind of result like that? if you said China only have 3% of the oil, which is 150,000 and then how come Germany get 144,000 for 8%? I don't get it, correct me if I'm wrong, but I feel so luck I know basic math so I will not use your own thinking into my paper.

Dear Anonymous,You may know basic math, but you're not so good at reading. See the article again. The first number relates to the bbl/day of imports, the second refers to the percentage of the imports for that country supplied by Libyan oil.